Author Wendy Foster, Business Advisor, Small Business Research + Enterprise Centre
There are two reasons why people do not spend time on business researching and planning; the why and how, so I hope to explain the real-life genuine benefits of spending time researching and planning for all businesses, and how you might go about it.
Firstly, I’d like to mention that the Small Business Research & Enterprise Centre (SBREC) is here to help you with this and having worked for the service for nearly 20 years I have met thousands of wonderful entrepreneurs. The thrill of supporting people who are creating something that would otherwise not exist never gets old.
So, let’s address the ‘why’. The simple answer is that it gives you the best opportunities to make a great success of starting and growing your business.
It is building a foundation, and the effort you can put in at the start, the stronger the foundation. That sounds a little simplistic, so let me use an example (with his permission) of someone who came to me after he bought an existing car-washing business but who had not done any research, to highlight some key issues:
- He very quickly discovered that the number of cars being washed did not cover the costs of the site rental, staff, and the materials. He had not worked out his budget.
- He hadn’t thought about looking for other potential suppliers of materials and so felt tied in with the existing supplier who may have been overcharging him.
- He didn’t know why there weren’t more customers. Having not researched the demographics he couldn’t know if the people living or working nearby were likely to have cars they would want hand-washed. Were there competitors nearby taking away custom?
- He wasn’t sure how to attract and retain customers. Researching consumers helps identify what marketing they respond to, whether it’s one or more social media platforms, printed flyers, word of mouth or adverts in magazines. Knowing this helps with marketing plans and campaigns, for example, if many of his consumers live nearby could he offer a loyalty discount, or a package discount. Referral discounts are also very popular. These discounts would be factored into his pricing strategy and plan so that in reality this would still generate enough income for a healthy budget and cashflow – this technique is called a loss leader.
- Before starting out he hadn’t even thought about what might go wrong and so hadn’t worked on the risks and how to manage them.
Spending time doing research and planning before launching your business helps you address these areas, stopping them from even becoming a problem. This entrepreneur had great passion and energy but found he should have directed some of that energy into the preparation! The second time round he did exactly that and had a solid foundation and clear direction for his new business venture.
Moving onto the ‘how’. The great news is that there are many tools and support services to help you with this. Using tools like the Business Model Canvas and SWOT (Strengths, Weakness, Opportunities, Threats) analysis are both good places to help you start brainstorming your ideas, whether you are at the very start or are looking to diversify or grow. As you start working on these you will find areas that you need to research for more information. At SBREC we have a range of specialist business databases to help you with this. We have data on markets/industries both for the UK and worldwide which look at what is happening in an industry now and what is forecast to happen over the next 5 years as well as what might impact that industry. This data will also give an idea of how easy it might be for entrepreneurs to enter that particular market, and what the running costs might be. We also have company profiles, including SWOT analyses which can give you a few pointers when you start thinking about your own SWOT analysis. SBREC has company data for over 6million active UK businesses, plus international directories. When you are looking for suppliers or companies to sell to, then being able to search by industry, location, and more, can help you identify potential contacts in companies that you won’t even have previously heard of.
As well as the specialist data, seek out webinars, blogs, and networking events. We are a nation of entrepreneurs and small businesses who thrive through networking and working together. And whether you are starting out or growing your business, then do reach out to SBREC, where we will be delighted to support you on your journey. “From the moment I made initial contact, the access to the incredible data and training, I have felt completely supported. Having a membership with you is a no-brainer.” (SBREC member)
*We strive to do our best when supporting small business and their growth. Our business databases can give you information and data that can help you with advertising, market research, company information, and industry factsheets. If you ave already taken the plunge, we would love for you to join us at a seminar, our workshops cover digital marketing, business model canvas and planning, demystifying taxes and intellectual property to name a few. Visit our events page or website for more information.